Tag Archives: virtual reality

Window Shopping and Shopping on Windows

A running theme over the last few years in business news in the US and elsewhere is the terminal decline of the physical retail store. Many of the big name chains once thought of as bastions of the high street have fallen victim to the online juggernauts, on what seems like a weekly basis. The finger of blame is most often pointed at Amazon, whose profits continue to soar to such extents that some financial analysts are now claiming that their share price is overvalued and based upon forecasted earnings of massive proportions.

It is possible that President Trump may attempt to curtail Amazon’s growth through trust-busting legislation – something which could be motivated by his feud with The Washington Post and its owner/Amazon exec Jeff Bezos – however there is little legal ground to challenge the etailer simply because their business model and disruptive technology offers a better deal for consumers as things currently stand. It’s true that few retailers can take on Amazon based on pure pricing, however there are still assets which Amazon does not yet have: a large high-street presence and refined customer service.

I was speaking to a colleague recently whose wife works as a beauty consultant in London’s West End. She was upset that although their footfall was good and plenty of customers wanted to try out products, very few actually bought anything, and many could be seen price-checking and purchasing on Amazon before they even left the store. Let’s be honest: many of us do this every time we shop. Her general feeling was that they shouldn’t even bother stocking anything in-store. This remark was borne of bitter resignation, but some retailers have done exactly that, using a sophisticated omnichannel model to remove the need for significant store inventory.

There are certain categories where consumers will always want to try products in person, and which if prove unsatisfactory can result in a glut of expensive return logistics. Clothing and fashion is an obvious candidate; US brand Bonobos recently posted a $60m increase in revenue over the past five years, driven by their Guideshop setup. Consumers visit physical stores to see the new lines, try on clothing, then pay to have clothes delivered when and where they wish. The store itself does not hold large stock or inventory. Bonobos’ system challenges the assumption that most consumers want to leave with the product in hand, and has allowed them to reinvest logistical savings in staff training and a high service-level.

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This phenomenon is also seeing green shoots for technology sales, with showroom setups such as London’s Sandbox offering hands-on experience with new categories including VR. Like Bonobos, Sandbox’s function is to give consumers the chance to try room-scale VR, something Context’s 2016 VR consumer survey showed to be a key factor in purchasing VR. At this stage in the category’s lifecycle relatively few consumers have tried room-scale VR, and would therefore be unwilling to part with the daunting initial upfront cost.

These kinds of demonstrations are arguably more important for VR marketing than traditional advertising. VR can be a revelatory experience, but selling it to someone who has never tried it is an uphill struggle. It is also fair to say that many consumers shop online to avoid feeling pressured by a salesperson, and at present very few retailers can offer truly excellent face-to-face customer service. By removing the onus of making the purchase then and there, and potentially allowing for price reductions to compete with Amazon, Bonobos’ solution, or a modified omnichannel setup could be the saviour of the high street, not to mention a huge boom time for the distribution channel and drop shipments.

The art of window-dressing has a long and proud history, once a place of hubris for serious-minded shop attendants and source of satire for comedians, but now the whole store offers a window into (Microsoft) Windows.

by JW

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Peddle Faster to Fly Your Unicorn: Could VSports Cause Unintentional Fitness?

In three decades of video gaming there have been some very odd on-screen instructions. The Grand Theft Auto series introduced a controversial healing mechanic, and in PS3’s 2010 title Heavy Rain players were encouraged to “press x to Jason [sic]”, however being instructed to pedal in order to start your unicorn must now be a close contender. It’s also fair to say that very few eSports or sit-down video games will draw much more than nervous perspiration, or perhaps the dreaded Nintendo Thumb some of us used to suffer when attempting to finish seemingly impossible titles like Battletoads (which if played with two players was actually impossible). The Nintendo Wii was the first mass-market gaming platform to show the potential for video games to help users truly exercise, and the motion controllers and uses beyond sedentary gaming were a major selling-point over seemingly superior competing products. The majority of users eventually grew to see the Wii Fit as a novelty workout video with interaction, and slowly consoles were retired in garages, ignored and eventually abandoned like so many gym memberships. Few of those Wii Fit owners have looked back since.blog1

As the VR industry has grown over the last two years a new form of exercise has emerged – Vsports. In this instance, the user is immersed in a 360 degree 3D world, transforming a session on an exercise machine into a totally different experience. Often complaints of reluctant joggers is that running through the streets of Balham is hardly exciting, and thudding on a treadmill whilst watching Simon Cowell’s latest autotuned starlet in the gym is drastically worse. What about running along the banks of the River Tiber whilst chasing rogue legionnaires, or indeed, flying a pedal-powered unicorn? The latter has been made possible by VirZOOM, a company so sure of its product that they are targeting their marketing directly at lapsed gym bunnies. My own aversion to jogging is the lack of competition and the abstract nature of lonely cardio exercise, however a gameplay element and opponents, both virtual and real, will push me the extra mile. Interestingly, in a 2016 CONTEXT survey of EU consumers, sport was the gaming category which excited them the most for VR, with 1 in 5 respondents expressing an interest; this could now mean sport in a very physically-active sense.

For those of us in the ICT industry who have been lucky enough to try VSports at events such as CES, general consensus is that this could be a big category for VR, both at home and in larger installations. As an analyst, I am frequently asked where the opportunities for VR lie for the channel, and VSports offer both a B2B and consumer market. Health technology is persistently strong in terms of sales, and the industry is accustomed to disruptive technology and wearables. Moreover, gyms have long been a customer of AV installers and resellers: almost all gyms contain dozens of TVs and LFDs. The sanitary aspect of VR headsets has not been missed by start-ups, with companies such as VR Cover popping up to sell washable VR peripherals.

Perhaps the most interesting example of the convergence of games, VR, and VSports is the phenomenon of accidental exercise. My own serendipitous encounter with VSport was whilst playing Knockout League on the Oculus Rift/Touch recently. After over an hour of shadow boxing I removed my headset to discover the sort of sweat I’d expect after a 5km run. I’m not the only industry professional to accidentally work out during a normal gaming session: Job Stauffer, Telltale’s head of creative communications recently announced that he’d lost over 50lb playing a VR game, in this case Sandboxing. For those of you in the channel who have routes to the healthcare verticals and are also lucky enough to be distributors or resellers of one of the high-end VR HMDs, my advice is to start some serious conversations about the new categories of VR Fitness Devices and Accessories.

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by JW

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Filed under Connectivity, gaming, Mobile technology, virtual reality

How PC Gaming Is Driving AI, Cars, and the UK Treasury’s Technology Policy

At CES 2017 back in January, Jen-Hsun Huang, CEO of Nvidia announced that “GPU-powered deep learning is driving the ability for computers to perceive the world… But one day, AI researchers met the GPU and the big bang of AI occurred.” Up until more recently, when most ICT analysts thought of Nvidia, the first thing to come to mind would have been gaming, and for a good reason. The core of Nvidia’s business is still PC Gaming where they continue to dominate the GFX hardware market. Jen-Hsun went on to explain that the “GPU had the benefit of being fuelled by the largest entertainment industry in the world, video games.” Indeed, PC gaming is one of the most processing-intensive activities a PC can be asked to perform, and that industry has gone from strength to strength over the past few years. Jen-Hsun was right to tout the success of PC gaming: CONTEXT’s data shows that sales of high-end VR-ready PCs shot up 1057% in terms of revenue y/y for the top 6 EU economies in Q4 2016, and figures from the Entertainment Retailers Association put gaming as contributing more to the UK economy in 2016 than either music or video sales at £2.96bn.

Several thousand miles away from Sin City, the importance of AI and driverless cars was being carefully noted by strategists and civil servants in Whitehall, culminating in the most recent budget announcement. The British government has promised £270m in funding for disruptive technologies such as driverless cars, AI, and robotics. Given the current hard-Brexit policies being pursued by Teresa May’s administration they are wise to support such green shoots; CONTEXT’s figures for professional GPUs back both this decision and Jen-Hsun’s assertion. Screen Shot 2017-03-16 at 13.21.25Sales of professional GPUs in the UK reversed a previous decline in Q3 2016, with Nvidia’s own Quadro series of GFX cards enjoying +25% y/y growth in revenue. More and more GPUs are being purchased to power deep learning and AI for large datacentres, rather than in their more traditional roles for 3D modelling and computer aided design.

It’s not uncommon for devices to be developed with one purpose in mind then being very successfully appropriated for another. Even Atari’s failed Jaguar gaming console ended up being cannibalised and used in dental equipment. The GPU is also the critical lynchpin of another emerging technology: Virtual Reality. In one profound statement, Jen-Hsun declared that “…all gaming was Virtual Reality,” and in many cases this rings true where a player inhabits a virtual world. It might not seem immediately obvious, but components built for PC gaming now power both AI and VR. As a result Nvidia’s share price has soared in recent months, finishing 2016 +224% up from the previous year, and promising to continue to rise as their partnerships and new ventures bear fruit, with professional visualization growing +11%, datacentre at +144% and automotive up +52% for Q4 2016.

This success eventually caused Nvidia’s shares to drop in February when the Q4 results were released as investors weighed up the risks of long-term returns (as driverless cars are still many years away from being commonplace), versus selling stock at an apex. To some extent, the UK government is taking a gamble on driverless cars becoming the norm, and this might reflect the modest £270 sum compared with much higher investment promised by other governments. Academic commentators have also welcomed this news due to the environmental benefits promised by AI-driven vehicles. The immediate future of AI and its importance to the UK economy is very encouraging, but much like Brexit, the longer-term outlook is beyond the most complex algorithm to accurately portend.

by JW

 

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Filed under Big data, Connectivity, gaming, IoT, Mobile technology, Smart Technology

Inversión, Contenido y Educación del Consumidor: CES y Realidad Virtual en 2017

En el CES de este año celebrado en Las Vegas, el CEO de Nvidia, Jen-Hsun Huang, anunció en su discurso de apertura a la prensa que están trabajando con Audi en un coche autónomo que saldrá a la venta en el 2020. También informó que el catalizador de todas sus innovaciones tecnológicas de la GPU había sido el gaming. De hecho el gaming se ha identificado como la actividad más pesada que el procesador de un PC de consumo tiene que llevar a cabo. Jen-Hsun declaró que “… todos los juegos son realidad virtual”, en la mayoría de los juegos se tiene que crear un mundo virtual en el que un jugador viva. Con algunas notables excepciones, CES 2017 fue el año del coche autónomo!

En cuanto a la Realidad Virtual, mi experiencia después de haber asistido al CES de este año hace que me pregunte:”¿qué será lo siguiente?” El año pasado fui testigo del lanzamiento de tres gafas de Realidad Virtual de alta gama para el consumidor (Rift, Vive, PSVR) y la comercialización agresiva de las Gear VR de Samsung, pero en cambio CES 2017 no ofreció muchas noticias sobre la Realidad Virtual, a excepción de nuevos fabricantes de HMDs y de sus complementos. En cuanto a los productos de hardware existentes, no hemos visto una adopción masiva de la Realidad Virtual durante el 2016 y esto no ha sido una sorpresa para CONTEXT.

El primer factor a tener en cuenta es el coste adicional de la Realidad Virtual. Se necesita un PC potente y costoso, o una PlayStation 4. Además, la experiencia de la Realidad Virtual en dispositivos móviles sigue siendo muy inferior en términos de procesamiento 3D, en comparación con los cascos de Realidad virtual que se conectan a un PC o a una consola. La Realidad Virtual Móvil debería ser el hogar natural de esta tecnología, dada la proliferación de teléfonos inteligentes en comparación con los PC gaming, pero aún no existe la gran aplicación que pueda impulsar las ventas; la Realidad Virtual todavía está esperando a su Pokémon Go !. Hasta que las GPUs móviles estén a la altura de las GPUs de los PCs de alta gama, los desarrolladores de aplicaciones deben enfocarse en los juegos ingeniosos y adictivos. Se puede hacer un paralelismo con los primeros días de Atari: los desarrolladores de aplicaciones de Realidad Virtual son esenciales para crear un género de entretenimiento desde cero.

Varias cosas deben suceder en 2017 para mejorar las ventas de los dispositivos de Realidad Virtual, además de reducirse los costes iniciales de adopción. En este momento, las tiendas de aplicaciones de estos dispositivos, e incluso la plataforma Steam PC, se inundan de contenido de Realidad Virtual barato y a menudo de mala calidad. Para la mayoría de los dispositivos, a excepción de las Rift, el universo de desarrolladores de Realidad Virtual de PCs está dominado por estudios independientes de calidad variable, y posiblemente esto, combinado con un mercado de software confuso y masificado, recuerde a las condiciones que causaron el colapso de la industria de videojuegos en 1983. Facebook y Oculus se destacan por su inversión en los estudios Oculus y el apoyo a los títulos AAA. Juegos como Chronos y The Unspoken nos dan una idea de lo bueno que puede ser el contenido de Realidad Virtual, y Facebook merece elogios por estar invirtiendo en software para el que probablemente no verá ganancias a corto plazo. En 2017 necesitamos más fabricantes que inviertan en contenido AAA de Realidad Virtual; después de todo, el mercado de juegos de PCs de alta gama está ayudando a revitalizar la industria madura del PC, y además, las Vive y las Rift dependen de estos PCs y de su contenido. El mensaje que la industria de Realidad Virtual necesita para 2017 es: inversión, contenido y educación del consumidor.

by EM

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2016 was always going to be the year of democratised VR, not mass adoption

Estimating shipments of products in new areas of IT is a bit like being the only lighthouse in view above banks of thick fog. It’s the only light you can see, so you’ve nothing to lose heading for it. We’ve been there with pocket PCs, Smartphones and Tablets. And while the fog has cleared for these products, the true state of the market for the much anticipated Virtual Reality headsets is still shrouded in mist.

At CONTEXT, as part of the work with our VR Research Group made up of major PC, HMD, and software vendors, our first predictions estimating the total number of VR headsets shipped in 2016 are conservative compared to some estimations from this time last year. If the basic HMDs are included, the lowest possible total global shipped units start at 8.5m, with true figures probably being closer to 12m+ once the plethora of minor Chinese brands are included. Theo Valich of global consortium VR First commented: “While we are seeing that the adoption of VR is waiting on content, the growth of VR in the emerging markets in Asia-Pacific is not being properly covered. The number of VR start-ups on both the hardware and software side is almost exponential.” The shipped units for the high-end headsets such as the HTC Vive, PSVR, and Oculus Rift CV1 are <15% of the total market, but to get a true picture of what has happened in 2016 and will develop in 2017, it is important that all types of headsets are included.

There are many factors to be considered when attempting to get a handle on the true state of the VR headset market. For a start, 2016 was never going to be about mass adoption for companies such as HTC and Oculus and here are several reasons why: in terms of the headsets designed for use with a PC, a very powerful machine is required and that rules out all but the most dedicated gamers and developers. Awareness of the category is only just starting to become widespread, and even for those with the required hardware, there is a lack of major hit AAA titles to drive sales.

In a recent survey, CONTEXT showed that only 10.5% of members of the general public in the EU had heard anything significant about VR, compared to 79.9% of gamers, with 26.5% of people having not heard anything at all. The issue facing the VR industry right now is that there is a transformative effect of trying it out that needs to happen; simply describing the experience is akin to attempting to explain the taste of Cola to a Martian. As a result, even the cheaper headsets – and yes, we are including the Google Cardboard – can make a profound impact on consumers. In 2016 anyone with a Smart Phone was able to experience VR for the first time, and thanks to Google and others there is a wealth of apps to demonstrate what VR can do. In the early stages of VR, such products are vital to raise awareness. Taking the analogy to the extreme, why would anyone spend $1000 on a sound system when they’ve never heard music on a transistor radio?

In summary, CONTEXT expect VR headset shipments to increase in 2017 for all types of VR headsets, with new industry verticals opening up. We’re seeing more and more VR technologies going through the ICT sales channels into a huge variety of sectors, including healthcare, education, elderly care, military, as well as major public entertainments. With current VR price points, the democratisation – and therefore unit shipments – can only increase, and all types of headsets will continue play a significant role, not just premium products.

by JW

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Tech Predictions: 2017

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In 2017 European PC sales in the business segment are likely to benefit from a gradual pick up of Windows 10 refreshes. In Western Europe in particular, the commercial PC segment is expected to also benefit from the need for enterprise mobility solutions which will be a co-driver in sales of both notebooks and mobile 2-in-1 products.

The consumer PC segment is expected to remain more challenged across Western Europe. There is a possibility that component shortages, which impacted product availability in 2H 2016, will lead to price increases in the first half of 2017which could affect demand. However, on a positive note, the market is likely to benefit from continuing high demand for gaming PCs. While this segment remains small in terms of volume, new technologies – including virtual reality – will also drive growth that will have a positive effect on revenue and margins.

From a wider, macroeconomic perspective, PC sales in a number of EMEA countries are likely to continue to be affected by uncertainties including currency fluctuations and political instability.
Marie-Christine Pygott, Senior Analyst, PCs

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View on Apple
Although you never know what Apple will pull out of the hat when launching new products, the last few years have been quite staid. The last “new” new Apple product was the Watch: but this was heavily trailered so, when it finally arrived, it wasn’t a surprise. We have waited in vain over the years for an Apple TV, and recently yawned when the new MacBook’s Touchbar was announced. In 2017 we have the prospect of yet another phone, the iPhone 8, and not much else.

Except, after much speculation, Apple has acknowledged for the first time that it is investing in autonomous car technology. In a letter to US transport regulators, Apple said the company was “excited about the potential of automated systems in many areas, including transportation”. Apple was first rumoured to be working on an autonomous vehicle in early 2015, when reports suggested that the company already had 600 employees working on an electric car design. Later that year, more rumours suggested that the company hoped to launch an electric car to the public by 2019.

So maybe Apple can surprise us next year. The race for electric vehicles is hotting up, and with the word being that Apple has been in talks to buy luxury-supercar maker McLaren, we may just see a prototype iCar roll onto the stage in 2017 after hearing those words, “one more thing”.
Jeremy Davies, CEO & Co-founder

Enterprise
CONTEXT will be closely tracking the evolution of storage systems and converged architecture: as cloud-managed wireless network service companies slowly but surely replace in-house wireless LAN appliances, we expect continued strong growth on these two fronts. Companies to watch: Cisco Meraki, Open-Mesh, Zebra (part of Extreme Networks), Ruckus.

Sales of solid-state drives (SSDs) have increased throughout 2016 and, for the first time, surpassed those of hard disk drives. As the price of SSDs fall and their capacity increases, 2017 will see this trend continue. In 2014, we predicted that 90% of storage components would be SSDs by 2020, and the industry is well on track to achieve this.
Gurvan Meyer, Senior Research Analyst, Enterprise Team

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Displays
Large Format Display sales in 2017 are expected to continue to grow strongly with demand being driven by the education and corporate sectors. For AV providers, the corporate business market continues to be a huge growth opportunity, with a big shift towards interactive products for meetings rooms, as corporates increasingly collaborate over multiple sites, with numerous remote attendees.  The education market is also expected to be a key driver of growth in the LFD segment with educational institutions increasingly adopting display solutions to change and enhance the ways they communicate with students, staff and visitors.
Lachlan Welsh, Senior Analyst, Displays

Imaging
Printer hardware sales will continue to contract overall, though some segments are expected to register growth in 2017, such as business inkjets with higher end products due to be released in 2017 to compete with laser devices. The shift from hardware to contract sales continues, therefore, the importance of partnerships and focus on channel partners will prevail. HP’s acquisition of Samsung printer business is expected to complete in the second half of 2017, as companies join their efforts aiming to disrupt the A3 copier market business.
Zivile Brazdziunaite, Senior Market Analyst, Imaging

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3D Printing
2017 will continue to see the two sides of 3D printing – the personal/desktop side (those under $5,000) and the industrial/professional side – evolve separately.  Desktop 3D printers will become even more affordable (some already cost as little as $300!) while the some of the world’s biggest brands will increase their presence in the Industrial/Professional market where technology will continue to advance and improve.

Desktop market leader XYZprinting has already expanded its brick-and-mortar retail presence – at Best Buy, Toys-R-Us, and Barnes and Noble in the US, and Darty, Dixons and Media Saturn in Europe – and it is expected to continue with aggressive price points in to promote further retail expansion around the globe. Next year will see HP fully enter the 3D printing world with the first shipments of their professional Multi-Jet Fusion 3D Printers, and a new business is to emerge from GE after their acquisition of two of the top five metal 3D printing companies in 2016.  HP and others will champion a change of focus in the plastics 3D printing market from rapid prototyping to mid-range production.
Chris Connery, Vice President Global Analysis and Research

VR & Gaming
The world of eSports will continue to grow in both popularity and recognition, as a movie is planned starring Will Ferrell on the burgeoning phenomenon. Vendors and retailers will pay more attention to PC gaming as the category offers them the chance to make up for losses in a sector which has been declining in the last few years. High average selling prices for gaming products, excellent attach rates and margins for gaming accessories, and the availability of unsecured consumer borrowing will be major drivers. Virtual reality will also continue to grow in the consumer space, although still at a modest pace. However we expect to see more HMDs going into the B2B and corporate reseller channels for which products such as the Hololens are a gift.
Jonathan Wagstaff, Country Manager UK & Ireland

Smart Home – Battle of the Giants
Back in October 2015 we predicted that new forms of control for smart home devices would stimulate growth in the market. We highlighted three: voice activation, gesture recognition and mind control. The first two are already here: voice control has exploded since Amazon launched the Echo in 2016 and 5 million devices have already been sold. We predict that this trend will grow quickly in 2017 with the Amazon Echo continuing to sell and the launch of Google Home in 2017. Google will apply a massive marketing budget – in the US they are already paying for end-of-gondola slots for Google Home devices.

With this in mind, we see four, and potentially five, giants battling for the smart home in 2017: Amazon, Google, Apple (with Homekit), Samsung (with Smart Things) and Microsoft. The ace up their sleeve for Amazon is entertainment (access to Prime Music), for Google it is search, for Apple and Samsung it is interoperability (potentially using the TV), and for Microsoft it is building out from the PC. We are optimistic that consumers will benefit: with a more coherent offer, small start-ups will no longer be able to create proprietary systems and existing systems will make themselves linkable to the big five in order to survive. It is too early to place bets on a winner, but Amazon has rapidly taken advantage of being first-mover. Gesture control will grow and develop in 2017, but mind control will need to wait for another year!
Adam Simon, Head of Retail

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Filed under 3D Printing, Displays, Imaging, IoT, IT Distribution, Mobile technology, PCs, Retail, Smart Home, virtual reality

Eagle Flight Over Paris

On November 29th, CONTEXT hosted a special VR breakfast in cooperation with Exertis France, AMD, MSI, Oculus, and Ubisoft in the Musée de l’Armée in les Invalides in Paris. Retailers, distributors and vendors gathered for the morning to hear the results of the latest CONTEXT European VR survey.

The VR survey was designed by members of the CONTEXT Virtual Reality Research group which includes companies such as Exertis, AMD, Oculus, John Lewis, Dell, CONTEXT, Retail Week and the University of Reading.  The research highlighted the expectations of European consumers towards VR and the potential barriers to purchase of VR products. It also showed in which channel the consumer were expecting to find VR products and how much they were ready to spend. The survey gave to the various industry players a clear understanding of what concerns they should address and what they should communicate in order to allow the technology to gain greater penetration of the market. A representative of FNAC, Laura Gaztambide, eCommerce Coordinator of Video Gaming, shared FNAC’s own experience on VR products and future plans to develop this market further.

Prior to hearing the results of the VR research, attendees watched a briefing on the European gaming market presented by Jonathan Wagstaff, UK & Ireland country manager at CONTEXT, and a detailed presentation on Ancient Rome made by university professor Matthew Nicholls who has made a full virtual reconstruction of the Eternal City, the outcome of 8 years of work. This helped the attendees to assess the educational potential and usage that VR is opening up.

Guests also had a chance to try Ubisoft’s Eagle Flight VR game flying over a virtual Paris, and were welcomed by a kind note of support for the VR industry from President Francois Hollande who was proceeding to an Army review in the Invalides on the same morning.

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by SA

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